Question 1

Which of the following is the best explanation for why the price of gasoline increases during the summer months?

Accepted Answer

A) Oil producers have higher costs of production in the summer. 
B) Sellers have to earn profits during the summer to cover losses in the winter. 
C) There is increased driving by families going on vacation. 
D) There is less competition among oil refineries in the summer. 
E) The number of gas stations open 24 hours a day rises in the summer months and so the price must rise to cover the higher costs. 
A) Oil producers have higher costs of production in the summer. 
B) Sellers have to earn profits during the summer to cover losses in the winter. 
C) There is increased driving by families going on vacation. 
D) There is less competition among oil refineries in the summer. 
E) The number of gas stations open 24 hours a day rises in the summer months and so the price must rise to cover the higher costs.

Question 2

-Scooters and bicycles are substitutes.Suppose that the price of a bicycle falls.Which of the figures above best illustrates how this fall in price affects the demand curve for scooters?

Accepted Answer

A) Figure A 
B) Figure B 
C) Figure C 
D) Figure D 
E) None of the above answers is correct because the change in the price of a bicycle will affect the supply curve not the demand curve. 
A) Figure A 
B) Figure B 
C) Figure C 
D) Figure D 
E) None of the above answers is correct because the change in the price of a bicycle will affect the supply curve not the demand curve.

Question 3

Ramen noodles are a staple food item for many college students.Ramen noodles are very inexpensive, easy to prepare, and can be combined easily with other foods.After students graduate, find employment, and earn a higher income, they decrease their Ramen noodle purchases significantly.In this case, Ramen noodles are

Accepted Answer

A) a normal good. 
B) an inferior good. 
C) a complement for higher income people. 
D) a substitute good. 
E) None of the above answers is correct. 
A) a normal good. 
B) an inferior good. 
C) a complement for higher income people. 
D) a substitute good. 
E) None of the above answers is correct.

Question 4

-The above figure shows the market for laptops.Which of the following shifts the supply curve from S₀ to S₁?

Accepted Answer

A) an increase in the cost of hard drives 
B) a decrease in the price of laptops 
C) an increase in the number of laptop manufactures and sellers 
D) an increase in the price of laptops 
E) an increase in the productivity of the workers manufacturing laptops 
A) an increase in the cost of hard drives 
B) a decrease in the price of laptops 
C) an increase in the number of laptop manufactures and sellers 
D) an increase in the price of laptops 
E) an increase in the productivity of the workers manufacturing laptops

Question 5

-The number of logging firms increases.Which of the figures above best illustrates this change?

Accepted Answer

A) Figure A 
B) Figure B 
C) Figure C 
D) Figure D 
E) Figure A and Figure D 
A) Figure A 
B) Figure B 
C) Figure C 
D) Figure D 
E) Figure A and Figure D

Question 6

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

Accepted Answer

The equilibrium quantity unambiguously i

Question 7

When the demand curve shifts rightward and the market moves to a new equilibrium, then the

Accepted Answer

A) supply increases. 
B) supply decreases. 
C) quantity supplied increases. 
D) quantity supplied decreases. 
E) price falls to restore the equilibrium. 
A) supply increases. 
B) supply decreases. 
C) quantity supplied increases. 
D) quantity supplied decreases. 
E) price falls to restore the equilibrium.

Question 8

A market is defined as

Accepted Answer

A) a physical place where people buy only goods. 
B) a physical place where people buy both goods and services. 
C) a store where people buy physical goods. 
D) any arrangement that brings buyers and sellers together. 
E) a place where one good is bartered for another. 
A) a physical place where people buy only goods. 
B) a physical place where people buy both goods and services. 
C) a store where people buy physical goods. 
D) any arrangement that brings buyers and sellers together. 
E) a place where one good is bartered for another.

Question 9

Smart phones are becoming less expensive as new technology reduces the cost of production.In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of smart phones.

Accepted Answer

Advances in technology increase the supp

Question 10

When moving along a demand curve, which of the following changes?

Accepted Answer

A) the consumers' incomes 
B) the prices of other goods 
C) the number of buyers 
D) the price of the good 
E) the consumers' preferences 
A) the consumers' incomes 
B) the prices of other goods 
C) the number of buyers 
D) the price of the good 
E) the consumers' preferences

Question 11

An increase in the productivity of producing jeans results in

Accepted Answer

A) the quantity of jeans supplied increasing. 
B) the supply of jeans increasing. 
C) buyers demanding more jeans because they are now more efficiently produced. 
D) buyers demanding fewer jeans because their price will fall, which signals lower quality. 
E) some change but the impact on the supply of jeans is impossible to predict. 
A) the quantity of jeans supplied increasing. 
B) the supply of jeans increasing. 
C) buyers demanding more jeans because they are now more efficiently produced. 
D) buyers demanding fewer jeans because their price will fall, which signals lower quality. 
E) some change but the impact on the supply of jeans is impossible to predict.

Question 12

Consumers regard Dell computers and Apple computers as substitutes.If the price of a Dell computer decreases, the

Accepted Answer

A) demand for Dell computers increases. 
B) demand for Apple computers increases. 
C) demand for Apple computers decreases. 
D) supply of Dell computers increases. 
E) demand for Dell computers decreases. 
A) demand for Dell computers increases. 
B) demand for Apple computers increases. 
C) demand for Apple computers decreases. 
D) supply of Dell computers increases. 
E) demand for Dell computers decreases.

Question 13

Assume a market is in equilibrium.There is an increase in supply, but no change in demand As a result the equilibrium price ________, and the equilibrium quantity ________.

Accepted Answer

A) rises; increases 
B) rises; decreases 
C) rises; does not change 
D) falls; decreases 
E) falls; increases 
A) rises; increases 
B) rises; decreases 
C) rises; does not change 
D) falls; decreases 
E) falls; increases

Question 14

Bagels and cream cheese are complementary goods.Suppose that the price for flour, which is used to produce bagels, increases.The equilibrium price of cream cheese ________ and the equilibrium quantity of cream cheese ________.

Accepted Answer

A) rises; decreases 
B) rises; increases 
C) falls; decreases 
D) does not change; does not change 
E) falls; increases 
A) rises; decreases 
B) rises; increases 
C) falls; decreases 
D) does not change; does not change 
E) falls; increases

Question 15

The quantity supplied of a good is

Accepted Answer

A) the same thing as the quantity demanded at each price. 
B) the amount that the people are willing and able to sell during a given time period at a specified price. 
C) equal to the difference between the quantity available and the quantity desired by all consumers and producers. 
D) the amount the firm will sell when it can sell all it wants. 
E) always larger than the quantity demanded at each price. 
A) the same thing as the quantity demanded at each price. 
B) the amount that the people are willing and able to sell during a given time period at a specified price. 
C) equal to the difference between the quantity available and the quantity desired by all consumers and producers. 
D) the amount the firm will sell when it can sell all it wants. 
E) always larger than the quantity demanded at each price.

Question 16

The American Dairy Association starts a highly successful advertising campaign that makes most people want to drink more milk.As a result,

Accepted Answer

A) the demand for milk increases. 
B) the quantity demanded of milk increases. 
C) the price of milk falls to encourage people to drink more milk. 
D) the demand for milk is not affected. 
E) the demand for milk decreases because the price of milk rises. 
A) the demand for milk increases. 
B) the quantity demanded of milk increases. 
C) the price of milk falls to encourage people to drink more milk. 
D) the demand for milk is not affected. 
E) the demand for milk decreases because the price of milk rises.

Question 17

There are five hundred buyers in the market for cheese.If we know each individual's demand curves, to find the market demand, we must

Accepted Answer

A) add the prices that each buyer will pay at every quantity. 
B) add the quantities that each buyer will purchase at every price. 
C) multiply the price times quantity for each buyer and then add the resulting products together. 
D) average the price each buyer is willing to pay for each given quantity. 
E) give up because there is no way to find the market demand. 
A) add the prices that each buyer will pay at every quantity. 
B) add the quantities that each buyer will purchase at every price. 
C) multiply the price times quantity for each buyer and then add the resulting products together. 
D) average the price each buyer is willing to pay for each given quantity. 
E) give up because there is no way to find the market demand.

Question 18

-The above figure shows the market for pizza.The market is in equilibrium when people's incomes decrease.If pizza is a normal good, then which point represents the most likely new price and quantity?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) E 
A) A 
B) B 
C) C 
D) D 
E) E

Question 19

-Soda and peanuts are complements.Other influences on buying plans remaining the same, a rise in the price of soda

Accepted Answer

A) increases the demand for peanuts. 
B) decreases the demand for peanuts. 
C) decreases the demand for soda. 
D) increases the demand for soda. 
E) has no effect on the demand for peanuts, though it does change the quantity demanded of peanuts. 
A) increases the demand for peanuts. 
B) decreases the demand for peanuts. 
C) decreases the demand for soda. 
D) increases the demand for soda. 
E) has no effect on the demand for peanuts, though it does change the quantity demanded of peanuts.

Question 20

When the demand for a good decreases, its equilibrium price ________ and equilibrium quantity ________.

Accepted Answer

A) falls; decreases 
B) falls; increases 
C) rises; decreases 
D) rises; increases 
E) falls; does not change 
A) falls; decreases 
B) falls; increases 
C) rises; decreases 
D) rises; increases 
E) falls; does not change

Which of the following is the best explanation for why the price of gasoline increases during the summer months?

-Scooters and bicycles are substitutes.Suppose that the price of a bicycle falls.Which of the figures above best illustrates how this fall in price affects the demand curve for scooters?

-The above figure shows the market for laptops.Which of the following shifts the supply curve from S₀ to S₁?

-The number of logging firms increases.Which of the figures above best illustrates this change?

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

When the demand curve shifts rightward and the market moves to a new equilibrium, then the

A market is defined as

Smart phones are becoming less expensive as new technology reduces the cost of production.In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of smart phones.

When moving along a demand curve, which of the following changes?

An increase in the productivity of producing jeans results in

Consumers regard Dell computers and Apple computers as substitutes.If the price of a Dell computer decreases, the

Assume a market is in equilibrium.There is an increase in supply, but no change in demand As a result the equilibrium price , and the equilibrium quantity .

Bagels and cream cheese are complementary goods.Suppose that the price for flour, which is used to produce bagels, increases.The equilibrium price of cream cheese and the equilibrium quantity of cream cheese .

The quantity supplied of a good is

The American Dairy Association starts a highly successful advertising campaign that makes most people want to drink more milk.As a result,

There are five hundred buyers in the market for cheese.If we know each individual's demand curves, to find the market demand, we must

-The above figure shows the market for pizza.The market is in equilibrium when people's incomes decrease.If pizza is a normal good, then which point represents the most likely new price and quantity?

-Soda and peanuts are complements.Other influences on buying plans remaining the same, a rise in the price of soda

When the demand for a good decreases, its equilibrium price and equilibrium quantity .

Getting Started

The Usand Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 4: Demand and Supply

Which of the following is the best explanation for why the price of gasoline increases during the summer months?

-Scooters and bicycles are substitutes.Suppose that the price of a bicycle falls.Which of the figures above best illustrates how this fall in price affects the demand curve for scooters?

-The above figure shows the market for laptops.Which of the following shifts the supply curve from S₀ to S₁?

-The number of logging firms increases.Which of the figures above best illustrates this change?

What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?

When the demand curve shifts rightward and the market moves to a new equilibrium, then the

A market is defined as

Smart phones are becoming less expensive as new technology reduces the cost of production.In a supply and demand model, explain the effects of the technological innovations and their effect on the quantity of smart phones.

When moving along a demand curve, which of the following changes?

An increase in the productivity of producing jeans results in

Consumers regard Dell computers and Apple computers as substitutes.If the price of a Dell computer decreases, the

Assume a market is in equilibrium.There is an increase in supply, but no change in demand As a result the equilibrium price ________, and the equilibrium quantity ________.

Bagels and cream cheese are complementary goods.Suppose that the price for flour, which is used to produce bagels, increases.The equilibrium price of cream cheese ________ and the equilibrium quantity of cream cheese ________.

The quantity supplied of a good is

The American Dairy Association starts a highly successful advertising campaign that makes most people want to drink more milk.As a result,

There are five hundred buyers in the market for cheese.If we know each individual's demand curves, to find the market demand, we must

-The above figure shows the market for pizza.The market is in equilibrium when people's incomes decrease.If pizza is a normal good, then which point represents the most likely new price and quantity?

-Soda and peanuts are complements.Other influences on buying plans remaining the same, a rise in the price of soda

When the demand for a good decreases, its equilibrium price ________ and equilibrium quantity ________.

Getting Started

The Usand Global Economies

The Economic Problem

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Government Actions in Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets With Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Assume a market is in equilibrium.There is an increase in supply, but no change in demand As a result the equilibrium price , and the equilibrium quantity .

Bagels and cream cheese are complementary goods.Suppose that the price for flour, which is used to produce bagels, increases.The equilibrium price of cream cheese and the equilibrium quantity of cream cheese .

When the demand for a good decreases, its equilibrium price and equilibrium quantity .